VCpedia by Leta Capital

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an essential SaaS business metric that shows how much recurring revenue you can expect, based on yearly subscriptions.

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is a person who lnvests in startups in the early stages with their own money and resources. These types of investments are rarely met, due to the risk uncertainty. Therefore, most angel investors are searching for a higher rate of return than those determined by traditional investment opportunities.

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are clauses in the agreement that give shareholders the right to keep their ownership percentages in case new shares are issued.

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is used by startups and investors to track the amount of monthly cash that a company spends before it starts generating its own income.

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starting a business with money and resources from the founders’ own pockets.

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a table providing a shareholders structure, the history of changes and all parameters which can influence it in the future.

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when a fund makes an investment and messages its LPs to put capital into the fund account to invest in the portfolio companies.

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a financial instrument typically used for investments in early-stage companies and startups.

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an analysis an investor makes of all the facts and figures of a potential investment. Can include an investigation of financial records and a measure of potential ROI.

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is a term that describes the rate at which business proposals and investment pitches coming and are being received by investment bankers and venture capitalists.

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a concise presentation given from an entrepreneur to a potential investor about an investment opportunity. The presentation should be concise enough to be shared during an elevator ride

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the sale or exchange of a company ownership for cash, debt, or equity.

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these are larger institutional platforms that invest in many different funds. This allows institutional investors to get allocations in some funds that they perhaps otherwise wouldn’t be able to. This entity is often referred to as a Limited Partner to the venture capital funds.

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shares are the total common shares of a company counting not only shares that are currently issued or outstanding but also shares that could be claimed through the conversion of convertible preferred stock or through the exercise of outstanding options and warrants.

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partners in a VC firm who are commonly managing a fund and are actively involved in the day-to-day operations of the business.

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High net worth individuals (HNWIs) are generally defined as individuals who have at least $1 million in liquid assets.

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a group of investors that agree to participate in an investment round of funding for a company.

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is a company or organization that support startups and early-stage companies.

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Includes several provisions related to early stage companies, including new regulation regarding the maximum number of shareholders private companies are allowed and changes to the method in which companies can solicit private investors.

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KPI stands for Key Performance Indicator. A KPI is a measure of performance that is used to evaluate how well an organization or individual is achieving their goals. KPIs are typically quantifiable, and they are used to track the progress of a business or individual over time. They are often used to identify areas for improvement, and to help make decisions about how to allocate resources and set goals.

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the investors who add their money to a VC fund and let General Partners invest that money for them.

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An event that could result in either investors or debt holders to receive cash from the company, either through acquisition or a sale of assets.

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is a document declaring the preliminary commitment/interest of one party to do business with another.

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the fees that a fund will charge its limited partners each year. Venture capital fund management fees typically range from 1–3% annually (usually 2%) and are generally charged based on committed capital during the investment period, and then invested capital after the investment period has finished.

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the total amount of income you earn from business operations minus any adjustments, such as accounting for returns, refunds, and discounts.

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an agreement between two parties to protect sensitive or confidential information, such as trade secrets, from being shared with outside parties.

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is the amount of profit realized from a business's ongoing operations and is calculated by subtracting operating expenses from a company's gross income.

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number of shares of common stock which has been reserved for early investors or employees of a start-up.

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the value of a company not including external funding or the latest round of funding.

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how much the company is worth after it receives the money and investments into it.

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is a presentation deck that is used to pitch your idea or company to investors or other audiences.

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sums up the income and expenses that were generated during a certain period of time, usually a month or a quarter.

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A quality of earnings report is a financial analysis that is performed to assess the quality of a company's earnings. This analysis typically looks at the components of a company's earnings, such as revenue, expenses, and profit, and evaluates them in order to determine the sustainability and reliability of the company's earnings. The quality of earnings report is often used by investors and analysts to help them make informed decisions about whether to invest in a company.

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all income from a sale is accounted for on the income statement. There is no consideration for any expenditures from any source.

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the financial performance of a company, using current financial information as a predictor of future performance.

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The runway is the number of months a startup can operate before it runs out of money

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SAFE notes (or Simple Agreement for Future Equity) are a simpler option than convertible notes. SAFE notes are documents that early-stage companies use to help raise pre-seed or seed capital. Essentially, a SAFE note acts as a legally binding promise to allow an investor to purchase a specified number of shares for an agreed-upon price at some point in the future. In simple terms, an investor will give a startup money and receive a promise to get equity, usually at a predetermined price when certain milestones are met.

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is a software delivery model in which a software application is hosted by a third-party provider and made available to customers over the internet. Customers can access the software through a web browser or a mobile app, and they pay a subscription fee to use the software on a monthly or annual basis.

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a document that includes the basic terms of a company’s fundraising round (or any investment).

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group of potential customers to whom a company wants to sell its products and services.

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is a privately held startup valued at over US$1 billion (such name implies the mythical animal to represent the statistical rarity of such successful ventures).

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the analytical process of determining the current (or projected) worth of an asset or a company.

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a way to reward early stage investors for taking on additional risk. The valuation cap sets the maximum price that the loan will convert into equity.

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a firm that manages venture capital funds. A venture capital firm may have several funds under its management. For example, Leta Capital has two funds under management.

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a sum of money investors (LPs) commit for investment in early-stage companies. Usually has limited size and limited life time.

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a motivation program established by an employer to give employees the right to certain asset classes. Employers use such type of incentive to reward loyal employees who remain with the company for a long period. There are 3 types of vesting schedules: milestone-based vesting (based on the achievement and performance of certain milestones in a company); time-based vesting (employees earn their percentage of stock options over time according to a cliff or schedule); hybrid vesting.

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the right to purchase stock at a later date at a fixed price. Similar to stock options, but usually given to investors, not employees.

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XR in the tech and VC world stands for “extended reality,” an umbrella term that covers VR, AR, and MR. XR tech modifies the physical world either by immersing you in the virtual environment, or augments the reality, or uses both of those tools to create a mixed reality.

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is a term used to refer to the period of time from the beginning of the current year up to the present. It is typically used to compare a company's performance or financial results during the current year with the same period in the previous year. For example, a company's YTD revenue would be the total amount of revenue it has generated since the beginning of the year. The YTD calculation is a useful tool for tracking a company's performance and progress over the course of a year.

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— the range of exit values were the interests of the holders of common shares and preferred shares are misaligned due to the effects of the liquidation preference.

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a fund that has invested all of its committed capital and continues to collect management fees despite little or no hope of achieving higher returns for investors. Many so-called zombie funds hold portfolio investments for several years past their predetermined investing period to continue garnering their management fee.